Activision Blizzard, Inc. (ATVI), Electronic Arts Inc. (EA): Can The Magic Support A Game System?

Reaching the Boys

While Disney’s core characters will make Infinity an interesting experiment, the real benefit is likely to come from expanding its recently added Marvel and Star Wars franchises. For a long time Disney had lacked compelling content for boys. These two purchases quickly changed that.

However, how the company would make use of the acquisitions has been a big question mark. Video games seems like the perfect extension. The market is predominantly male and games involving super heros and the Star Wars franchise have been popular for years. For example, Electronic Arts Inc. (NASDAQ:EA) launched its Stars Wars Old Republic game in December of 2011 and reported selling more than two million copies in about a month. It remains a popular title.

Existing relationships for video games such as that one, and Activision Blizzard, Inc. (NASDAQ:ATVI) with Spider Man, among many others, could make Disney look more like a competitor than a partner. However, Disney has so many characters in its stable, from X-Men to Goofy, that the two dominant game companies would be foolish to stop working with the media giant. Electronic Arts Inc. (NASDAQ:EA), then, isn’t going to kill Old Republic unless the customer base wanes.

Does Disney have what it takes?

The big question is if Disney can make this into a long-term success story. While it brings a great brand image and tons of content to the picture, it still needs to run with the big boys if it wants to succeed. Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA) are fierce competitors in a very challenging market, and Infinity is going to look like a copycat offering to many potential customers.

Skylanders is also launching a new game at about the same time as Infinity is set to launch. It won’t be easy taking on an existing product with an installed customer base. That said, Disney has plenty of money to support its effort. And reaching the male market would greatly expand its business and allow it to make full use of its new media properties.

In the end, this could be a big release for the company. Shareholders should monitor the game’s initial results, as it could add notably to the top line over time if it gains traction with customers.

The article Can The Magic Support A Game System? originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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